If tennis ace Roger Federer were a tech company right now, he might be VMware. Long the dominant player in his sport, he got a nasty dose of reality at last week's Australian Open. Hang on and let me torture this sports metaphor just a little longer -- likewise, VMware got knocked off its do-no-wrong perch
If tennis ace Roger Federer were a tech company right now, he might be VMware. Long the dominant player in his sport, he got a nasty dose of reality at last week's Australian Open. Hang on and let me torture this sports metaphor just a little longer -- likewise, VMware got knocked off its do-no-wrong perch after Monday's earnings report and its forecast about inroads by the competition.VMware's share price was off more than 30% Tuesday, closing at $54.87, less than half of the $125 high it hit right after its August 2007 IPO. The reason behind this erosion? In part, it was due to VMware missing fourth-quarter revenue targets. So instead of 82% growth, the vendor checked in with a paltry 80%.
How many companies would love to have that problem?
That wasn't the whole story, though. More troubling to the market was VMware's forecast that growth might tumble down to around 50% this year, given a generally softer economy coupled with some real competition in the virtual machine space from Oracle and Microsoft.
EMC, which owns 85% of VMware, released its own earnings, with strong 4Q07 and CY07 results -- both up 19% over the same period a year ago. Click to the bottom of this story to see why CEO Joe Tucci is completely unfazed by this big burp in the virtualization market.
VMware execs also said Monday their model going forward doesn't include price cutting on existing products, but rather, adding new features to them. After checking out this blog entry from one of VMware's product development directors, it's pretty safe to conclude that lots of new management features are coming down the pike in 2008 to improve on the virtual appliance experience, and to resolve changes in the way virtualization subverts traditional network and system management thinking. Something tells me these features may have just gotten fast-tracked, given all the market turmoil.
Like in tennis, there's always another day to play. As with Federer, none of VMware's competitors have written anyone off. Both sets of opponents sense an opening. Tomorrow's headlines will be filled with how they exploit it.
Social is a Business ImperativeThe use of social media for a host of business purposes is rising. Indeed, social is quickly moving from cutting edge to business basic. Organizations that have so far ignored social - either because they thought it was a passing fad or just didnít have the resources to properly evaluate potential use cases and products - must start giving it serious consideration.
Social is a Business ImperativeSocial media is critical in the age of digital business. How can IT help? First, work with the marketing team to set up social networking programs on Facebook, Twitter, and LinkedIn, at minimum. Then work to put social media sentiment analytics in place to measure success.